NatWest has swung to a huge profit for the past year of £4bn as the bank released more money it held to one side during the Covid-19 pandemic.
The bank reported an operating pre-tax profit of £4bn in 2021, up from an operating pre-tax loss of £481m a year earlier.
The Edinburgh headquartered bank's operating profit for the whole group was £4.3bn.
It experienced a 2.6% growth in its lending business for the previous year up to £7.8bn.
Natwest managed to reduce its cost by 4% to £256m from the previous year. It announced it had distributed £1.2bn in dividends for 2021 with market buy-backs worth £1.5bn and direct buy-backs valued at £1.1bn.
Around £1.7bn was transferred back to the UK Government in dividends and buybacks for 2021.
The group is now targeting an income of more than £11bn in 2022.
NatWest Group chief executive, Alison Rose, said: “NatWest Group delivered a strong performance in 2021 as we returned to profitability, made progress against our strategy and distributed more than £3.8bn of capital to our shareholders, including £1.7bn to the taxpayer.
“We are acutely aware of the challenges that many people, families and businesses continue to face up and down the country and are working alongside our customers to provide the support they need – whether that is managing their money better, saving for a house or retirement or starting or growing a new business – as well as playing a leading role in the transition to Net Zero.”
Zoe Gillespie, investment manager at Brewin Dolphin, said: “NatWest has beaten expectations again and looks set to continue on its positive trajectory. The net impairment release of nearly £1.3 billion, bumper profits, and strong capital reserves point to a bank in good health.
"The increased dividend and share buyback programme suggest NatWest’s management team are optimistic about the year ahead, while rising interest rates should only benefit its core business. NatWest is now much more attractive as an investment prospect, notwithstanding the likelihood of the government winding down its substantial stake in the bank.”
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